Seller Concessions Calculator

What are seller concessions?

Seller concessions are credits the seller gives the buyer at closing to cover some of the buyer's closing costs. They are negotiated as part of the purchase offer and are commonly used to reduce the buyer's out-of-pocket cash.

How much can a seller contribute in concessions?

It depends on the loan type. Conventional loans allow 2%–9% of the purchase price depending on down payment. FHA allows up to 6%, VA up to 4%, and USDA up to 6%. Your lender can confirm the limit for your loan.

Can seller concessions be used for the down payment?

No. Seller concessions can only cover closing costs and prepaid expenses (taxes, insurance, escrow), not the down payment. The down payment must come from the buyer's own funds or an approved gift source.

Do seller concessions lower my monthly payment?

Seller concessions do not change your loan amount or rate, so they do not lower your monthly principal and interest payment. They reduce your out-of-pocket cash at closing. If the concession funds a buydown, it can lower your payment for the first few years.

Should I ask for seller concessions or a lower price?

If you are short on cash for closing, ask for concessions. If you have plenty of cash but want a lower payment, ask for a lower price. A lower price reduces your loan amount and payment; concessions reduce cash at closing.

Can seller concessions fund a mortgage buydown?

Yes. A seller-funded temporary buydown (like a 3-2-1 or 2-1 buydown) is a common use of seller concessions. The seller pays the upfront cost of the buydown at closing, lowering your rate for the first few years. Try our buydown calculator to see the impact.